Categorized | News

Vitale Bill Would Expand Transparency at Horizon Blue Cross/Blue Shield


Compromise agreement would maintain goals of required financial reporting, additional public board members and responsible use of excess reserves

Press Release 7/3/17

TRENTON – Senator Joseph F. Vitale today offered legislation that would expand transparency and accountability by Horizon Blue Cross Blue Shield of New Jersey, the state’s only nonprofit health services corporation, by requiring enhanced financial reporting, adding two public members to the company board, and setting a cap on the insurance company’s reserves.

“I am pleased that we have reached agreement on legislation that will ensure greater transparency and accountability by Horizon to its policyholders and the public,” said Senator Vitale (D-Middlesex). “I said from the very beginning that I wanted to bring Horizon to the table for open discussions. I am happy that we can now implement this vital reform legislation, pass a budget that funds our social service and education priorities, and ends the government shutdown.”

Agreement on the compromise legislation was reached after Senate President Steve Sweeney (D-Gloucester) invited Assembly Speaker Vincent Prieto (D-Hudson) and Horizon CEO Bob Marino to meet with him and Senator Vitale to work out an agreement on Horizon reform legislation to end the budget impasse.

“I would like to thank Senate President Sweeney for his leadership, and Speaker Prieto and CEO Marino for their willingness to work with us to achieve a compromise,” Senator Vitale said.

Senator Vitale, the chairman of the Senate Health, Human Services and Senior Services Committee, said the reform legislation, S-2, is patterned after the reforms contained in the bill he introduced last Monday. The bill would:

• Establish an appropriate range of reserves for Horizon requiring a minimum of 550% of Risk-Based Capital reserves and a “hard cap” maximum of 725%, sufficient to cover claims for all of its policyholders in the event of a catastrophic medical emergency such as superstorm Sandy when regular premium payments from policyholders were delayed.

• Require the state Department of Banking and Insurance to commission independent annual audits to determine Horizon’s reserve level, which would be paid for by Horizon.

• Set up a process for Horizon to submit a plan to the Department of Banking and Insurance to determine how excess reserves above the 725% level should be used to reduce future policyholder premiums or otherwise benefit policyholders.

• Require the appointment of two additional public members with a background in healthcare, finance or insurance to the Horizon board – one each by the Senate President and the Assembly Speaker — bringing the total board membership to 17, including 11 currently appointed by Horizon and four by the Governor.

• Require the Department of Banking and Insurance to establish requirements for health services corporations to provide detailed financial reporting information, including executive compensation, to be posted on the department website.

“This legislation establishes appropriate limits for Horizon’s reserve, which comes out of the pocket of policyholders, and a process to allocate any excess reserve funds to the benefit of policyholders,” said Senator Vitale. “It provides greater transparency so that consumers know exactly how much their insurer spends and for what purpose. In addition, it creates greater public oversight by adding two more public members to the Horizon board.

“Equally important is what this bill does not do,” he said. “It will not raise premiums for Horizon customers. It will not take away anyone’s health insurance. And it will not give any governor the power to take millions of dollars in Horizon Blue Cross Blue Shield reserves to pay for state programs. The bill specifically states that no determination on Horizon’s reserves would be made until April 1, 2018 – after a new governor takes office.”

Senator Vitale said S-2 – like his previous bill – was modeled after Pennsylvania regulations that established a range of reserves for the four Blue Cross Blue Shield companies operating in that state, and noted that Massachusetts and other states have adopted similar percentage caps on Blue Cross Blue Shield reserves to protect policyholders against companies building up unnecessarily large reserves out of the pockets of policyholders. In 2016, according to Horizon, the company carried a 620% reserve, sufficient to pay 75 days of policyholder claims.

Senate President Sweeney thanked Senator Vitale for his leadership role in developing the Horizon reform legislation.

“I asked Joe Vitale to take the lead role in developing the Horizon legislation because of his integrity, expertise and commitment to developing healthcare policies that are in the best interest of the people of New Jersey. Once again, he has performed commendably in balancing complex and competing policy interests for the betterment of our state,” Senator Sweeney said.

Comments are closed.

Browse Current Issue - Click Here

Perth Amboy Calendar

TUES. Nov. 14
• BID,
4 p.m.
City Hall, High St.
• Library Board of Trustees,
5 p.m.
Library, Jefferson St.

MON. Nov 20
• City Council,Caucus 4:30 p.m.
City Hall, High St.
• City Council, Regular, 7 p.m.
City Hall, High St.

THURS. Nov. 30
• Historic Preservation Commission,
7:00 p.m.
PAHS, Eagle Ave.

Stay informed! Attend public meetings. All are welcome!

South Amboy Calendar

WED. Dec. 6
• City Council, Regular,
7 p.m.
City Hall, N. Broadway

Stay informed! Attend public meetings. All are welcome!